ANALYST VIEWS: DO YOU THINK INFLATION WILL FALL BACK TO BELOW TARGET THIS YEAR?

SIMON WARD | HENDERSON
Assuming no significant impact from Budget decisions, CPI inflation is projected to fluctuate in a 3.0-3.25 per cent range until mid-year before declining modestly during the second half, remaining well above the two per cent target.

ALAN CLARKE | BNP PARIBAS
“We expect inflation to be stable in the coming months, not least due to the the rising impact of petrol prices. We expect the downward trajectory to continue so inflation ends 2010 above target, before falling below two per cent in 2011.

H E T A L M E H T A | E & Y I T E M C L U B
As the year progresses, and the pace of recovery remains slow, the margin of spare capacity in the economy will remain significant. This will drag CPI inflation back down towards the two per cent target by the end of the year. With this in mind, there is no reason for the Bank of England to alter its monetary policy stance and we expect interest rates to stay on hold until the end of the year.